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Decriminalise job creation!

The new government is here, despite its unpopularity by a great deal of the public and has already its first formative essay, named the Government Manifesto. Its importance tends to be overrated, despite that in past it has shown to be merely a formative essay. There were times, where parts of the Manifesto were rather cautious, but the government managed to pass more, for instance, the flat tax, but most of the times it is the opposite case when praiseworthy motions remain solely on paper. There is only a weak correlation between what governments promise and actually do. However, it is always better when the Manifesto consists of concrete formulations of practically right intentions than of general claims expressing nonsense.

The government composition shows that one part will prefer the interests of the employees and lower social classes and the other the interests of employers and entrepreneurs. I put into the attention of both parts of the government one important theme which can benefit both groups of their voting bases – easing of employment laws. Due to the current legislative state, the appropriate name of the passage of this concern in the Manifesto would be “Decriminalisation of employment”. Let´s see.

The great and so far unsolved problem is a huge gap between the cost of labour for theemployer and what the employee actually receives. With a gross average salary of 882 euros in 2015, the total cost of labour for theemployer was 1192 euro, but the employee really received only 679 euros. This is the reason for employer´s complaints of the too high costs of labour and employee´s complaints about unsatisfactory salaries. Both are right at the same time. The difference, 513 euros, is taken by the state in various taxes. It is in their common benefit to ask from their elective representatives to pass such laws, that will raise real salaries and at the same time decrease the costs of labour for employers.

The absurd tax burden is not all that worsens the employability. Every self-employed person knows the immense amount of regulative and administrative bureaucratic difficulties which even increase rapidlywhen trying to employ the first employee. At that moment, the self-employed person needs to fulfil requirements spread across eight laws with over thousand paragraphs, breaking of which is threatened by more than 80 fines, which have a cumulative maximum of 1,5 million euros.

Job creation is a mantra of politicians. They are, however, not need to be bought by expensive investment stimuli or projects funded by the European Union. All is needed is to decriminalise the employment by removing the obstacles which make job creation a criminal offence.